Five Reasons 'Extended' Warranties Are Worthless

When buying anything from a car to a camera, more times than not you are offered an "extended warranty" which is at a cost to you. So, we wanted to know if an extended warranty worth the money. According to a Consumer Affairs report, there are at least five reasons they are not.

First, the warranty usually cost more than it's worth, especially on low end electronics, where it would be cheaper to replace it in a few years than repair it.

Second, the warranty may be unreliable. Some companies don't use their own repair techs and instead use subcontractors that may or may not be able to fix the issue.

Third, certain repairs aren't covered. The warranty may not cover what you think it does, so read the fine print.

Fourth, be aware the warranty underwriter may go out of business, making the warranty worthless.

And finally, watch that the extended warranty doesn't overlap the manufacturer's warranty. In that case, you could be paying for an extended warranty concurrently while you're already under a manufacturer's warranty.

Click here to read Consumer Affairs report in its entirety.